Power shortages

Wednesday, March 26

For many developing countries, sustained strong growth has led to power demand outstripping supply. Subsequent power shortages could prove a brake on the rate of economic growth.

Developing countries have tended to focus on short-term industrialisation -- to provide jobs and raise standards of living -- while failing to make long-term investments in power infrastructure that will allow growth to continue at the same pace.

Subsidies and regulated prices remain a serious barrier to investment, and thus are a major theme behind power shortages in high-growth developing economies.

As a result, long periods of sustained growth have resulted in capacity constraints -- an unsustainable long-term dynamic.